Economic slowdown brings bounty to ship-breaking yard in Gujarat

Published: Thursday, March 26, 2009, 13:45 [IST]

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Sachana (Gujarat), Mar 25 (ANI): A global economic slowdown has hit industries ranging from automakers to investment banks, but in Sachana village of Gujarat, business is at record levels and workers are struggling to meet the demands.

In Sachana, home to the world's largest ship breaking facility on the coast of Gujarat, as a slowdown in global trade and lower freight rates mean ships are being scrapped faster.

But there is a flip side. Activists fret that the booming business will encourage a disregard for safety and environment guidelines, which they say ship breakers have already been flouting with impunity.

Men in blue overalls and hard hats, operating cranes, wielding blowtorches, hacksaws and hammers swarm over the beached ships, many condemned to a premature end because of the slowdown.

"There has been a dip in the freight due to the recession. The freight has registered a dip by 70 percent so the owners want to dispose of their old ships, especially the ones that are 15-20 years old. They had wanted to operate those ships in coastal areas which are not possible now so instead of keeping the ships docked at their yards, they are selling them off for scrapping," said Ashfak Khatri, Ship breaker-trader, Secretary, Sachana Ship Breaking Yard.

The current scenario has buoyed the hopes of the ship breakers. Khatri feels that for next three years, the ship breaking work will continue to boom non-stop.

Ships were once either sunk or taken apart in the countries where they were built, before high costs and environmental restrictions drove ship breaking efforts elsewhere.

India, China, Pakistan and Bangladesh carry out 80 percent of the world's ship breaking business. Labour activists said this is largely because of cheap labour costs and lax safety standards that fail to protect workers exposed to toxic chemicals as they dismantle the scrapped vessels.

About 150-200 workers can break down a 10,000-tonne ship in three months, salvaging nearly every part. About 80 percent of a ship's steel is reusable steel, cheaper than primary steel and used mostly in construction.

With a property slump from the global recession, demand for steel has fallen and prices have dropped by 80 percent since mid-2008 when steel along with other commodities were enjoying record highs.

Nevertheless, profits from the booming demand for ship breaking services have turned the businessmen, who lease the yards, into millionaires.

The port officers at Sachana however claim to create an atmosphere of safety for the ship breaking workers.

"With the help of the plot holders we have tried to create a safe and sound atmosphere for the workers at the yard for breaking the ships in the reason to Supreme Court guidelines. And I'm very thankful to ship breakers who have cooperated a lot in this and have followed the laws in ship breaking as result of which there is a very conducive atmosphere," said S Chadda, port officer. By Ami Sharma (ANI)